Administrative Policies and Procedures Manual - Policy 2680: Payroll Overpayments and Collection

Date Originally Issued: 01-01-2012
Revised: 12-12-2016

Authorized by RPM 3.1 ("Responsibilities of the President")

Process Owner: University Controller and HSC Senior Executive Officer for Finance and Administration

1. General

This policy establishes the process for identifying, remedying, and recouping salary overpayments to University employees. This policy applies to all faculty, staff, and student employees.

2. Responsibilities and Authority

The University Payroll Department is responsible for making timely and accurate salary payments to employees, subject to information provided by UNM departments and employees. On occasion, due to errors in processing, timeliness of submission, and reporting, employees may be paid more than is owed to them. Department administrators are responsible for retaining related payroll documentation and for reviewing payroll reports after each pay period to ensure that there are no discrepancies in employees’ pay. When a department administrator becomes aware of an overpayment, he or she is responsible for reporting it to the Payroll Department as soon as the error is discovered. When an employee becomes aware of an overpayment, the employee is responsible for reporting it directly to the Payroll Department and to his or her department administrator. 

For employees who leave the University before full repayment has been made, the University is authorized to pursue repayment after termination, including by deducting from the employee’s final salary payment any repayment amount not yet received.

Employees must repay all amounts paid in excess, regardless of how or why the overpayment occurred.  

3. Administration

Upon discovering that a payment has been made in error, the Payroll Department will research the source of the error and will calculate the amount paid in error, accounting for taxes, retirement, and other amounts withheld. The Payroll Department will notify the employee and supervisor by email of the overpayment amount, the dates on which the overpayment occurred, how the overpayment occurred if known, and provide notice that the overpayment will be deducted from the next payroll payment in process as applicable.  

If the overpayment amount is less than fifty percent (50%) of the employee’s regular bi-weekly or monthly payroll payment, it will be automatically deducted from the next regularly scheduled payroll payment.

Repayment in installments is only available on an exception basis if the overpayment is significantly large and would cause a hardship to the employee to pay it back in one (1) payment or would bring the employee’s rate of pay below minimum wage. The employee must remit payment or notify the Payroll Department in writing via email or letter to request repayment in installments within ten (10) calendar days from the date of the email notification from the Payroll Department. If the employee fails to respond to the email, then Payroll will withhold repayment from the employee’s next paycheck. If installments are approved, the time period for repayment will not exceed three (3) months or the end of the calendar year, whichever is sooner. The full repayment amount must be received within the same calendar year as the overpayment.  

In conjunction with the employee’s department, the Employment Area, or other appropriate core office, the Payroll Department will ensure that all backup documentation of the overpayment has been submitted to the Payroll Department for audit purposes and that all appropriate corrections to the Banner system are completed. 

4. Enforcement

The University must adhere to a New Mexico statute, § 30-23-2, NMSA 1978, which states:

Paying or receiving money for services not rendered consists of knowingly making or receiving payment or causing payment to made from public funds where such payment purports to be for wages, salary, or remuneration for personal services which have in fact been rendered. Whoever commits paying or receiving public moneys for services not rendered is guilty of a fourth-degree felony.  

Failure to comply with this policy can result in disciplinary action up to and including dismissal.